There is a definite room for Virtual Organization (VO) in the future due to rapid recent developments, especially in the field of Information Technology (IT). Significant improvements in wireless technologies are happening where fourth-generation 4G wireless networks will offer high speed mobile voice/data networks. The 4G standards will be deployed to support significantly higher bandwidth over wireless communications. Phang (2001) mentioned the much increased mobile bandwidth will encourage higher demand from wireless subscribers for collaborative and multimedia services such as SKYPE and Google Hangout.
The Internet has provided traditional retailers a new means with which to serve customers. According to Bernstein et al (2008), many ‘‘bricks-and-mortar’’ retailers have transformed to ‘‘clicks-and-mortar’’ by incorporating Internet sales which include Best Buy, Wal-Mart and Barnes & Noble. Various Internet-enabled business models have emerged. Establishing online sales allows retailers to reach a larger market than they would be able to by operating only physical stores. There are many VO such as Google and Facebook that offer online advertising that may boost company’s brand to the whole world.
Organizational Changes
Organizations are slowly evolving and changing into new forms. The rising partnerships and strategic alliances among various organizations are expected to increase as for competitive success in fast-changing global markets according to Doz and Hamel (1998). These collaborative efforts can be facilitated and supported by VO structures such as the joint development between Google and Motorola to develop the Moto X phones which combines the VO traits of Google with Motorola phone manufacturing abilities in 2011. A similar approach was taken Microsoft Corporation recently by acquiring Nokia Handset and Services business for a similar objective for better synergy and as counter strategy.
Another form of strategic alliance is through outsourcing. Many organizations are turning to outsourcing to fulfil their business requirements, especially when these requirements are outside their core mission such as IT according to Palugod and Palugod (2011). FedEx Corporation has recently outsourced most of their IT operations to third-party vendors such as IBM to manage their IT operations through application of VO (Information week, 2003). FedEx's objective is to reduce their environmental footprint and reduce the need for physical storage space for their IT servers; this has been applied successfully by VO driven firms such as Amazon, Facebook and Google.
People Trends
Employee expectations are expected to change with the increasing demand for more flexible working arrangements. This also coincides with the increased globalization of many organizations. The increased mobility requirement for the employees includes initiatives such as working from home and teleworking especially for working parents.
As it’s getting harder to manage the portfolio worldwide, teleconferencing and video conferencing using CISCO devices such as that are fast becoming norm in many global multinational companies. Microsoft Corporation uses a lot of teleworking and conferencing for collaborative work between its development centre in Washington, US and Hyderabad, India for development of its products such as Bing and Lync (Livemint, 2013)
There is also opportunity to leverage the immense cultural and geographical diversity in the world. The growing level of awareness for better working environment has also been growing in many organizations. Large accounting firms such as Deloitte, Ernst & Young, KPMG and PwC have shrink their office spaces by introducing more open cubicles and no permanent workstations for non-managerial employees (Marketplace 2013). This move is consistent with the trend of the industry where staffs are expected to be mobile and can work anywhere with their laptop and remote access application.
Trends and Future Prospects
Technological Changes
There is a definite room for Virtual Organization (VO) in the future due to rapid recent developments, especially in the field of Information Technology (IT). Significant improvements in wireless technologies are happening where fourth-generation 4G wireless networks will offer high speed mobile voice/data networks. The 4G standards will be deployed to support significantly higher bandwidth over wireless communications. Phang (2001) mentioned the much increased mobile bandwidth will encourage higher demand from wireless subscribers for collaborative and multimedia services such as SKYPE and Google Hangout.
The Internet has provided traditional retailers a new means with which to serve customers. According to Bernstein et al (2008), many ‘‘bricks-and-mortar’’ retailers have transformed to ‘‘clicks-and-mortar’’ by incorporating Internet sales which include Best Buy, Wal-Mart and Barnes & Noble. Various Internet-enabled business models have emerged. Establishing online sales allows retailers to reach a larger market than they would be able to by operating only physical stores. There are many VO such as Google and Facebook that offer online advertising that may boost company’s brand to the whole world.
Organizational Changes
Organizations are slowly evolving and changing into new forms. The rising partnerships and strategic alliances among various organizations are expected to increase as for competitive success in fast-changing global markets according to Doz and Hamel (1998). These collaborative efforts can be facilitated and supported by VO structures such as the joint development between Google and Motorola to develop the Moto X phones which combines the VO traits of Google with Motorola phone manufacturing abilities in 2011. A similar approach was taken Microsoft Corporation recently by acquiring Nokia Handset and Services business for a similar objective for better synergy and as counter strategy.
Another form of strategic alliance is through outsourcing. Many organizations are turning to outsourcing to fulfil their business requirements, especially when these requirements are outside their core mission such as IT according to Palugod and Palugod (2011). FedEx Corporation has recently outsourced most of their IT operations to third-party vendors such as IBM to manage their IT operations through application of VO (Information week, 2003). FedEx's objective is to reduce their environmental footprint and reduce the need for physical storage space for their IT servers; this has been applied successfully by VO driven firms such as Amazon, Facebook and Google.
People Trends
Employee expectations are expected to change with the increasing demand for more flexible working arrangements. This also coincides with the increased globalization of many organizations. The increased mobility requirement for the employees includes initiatives such as working from home and teleworking especially for working parents.
As it’s getting harder to manage the portfolio worldwide, teleconferencing and video conferencing using CISCO devices such as that are fast becoming norm in many global multinational companies. Microsoft Corporation uses a lot of teleworking and conferencing for collaborative work between its development centre in Washington, US and Hyderabad, India for development of its products such as Bing and Lync (Livemint, 2013)
There is also opportunity to leverage the immense cultural and geographical diversity in the world. The growing level of awareness for better working environment has also been growing in many organizations. Large accounting firms such as Deloitte, Ernst & Young, KPMG and PwC have shrink their office spaces by introducing more open cubicles and no permanent workstations for non-managerial employees (Marketplace 2013). This move is consistent with the trend of the industry where staffs are expected to be mobile and can work anywhere with their laptop and remote access application.
References
Bernstein, F., Jing, S. S., Zheng, X., (2008) ‘‘Bricks-and-mortar’’ vs. ‘‘clicks-and-mortar’’: An equilibrium analysis, European Journal of Operational Research 187, pp 671–690
Doz, Y. and Hamel, G. (1998) Alliance Advantage: The art of creating value through partnering. Harvard Business School Press.
Information week (2013) FedEx makes strategic shift [Online]. Informationweek.com. Retrieved from:http://www.informationweek.com/it-leadership/fedex-makes-strategic-shift/d/d-id/1109834? [Accessed 11 December 2013]
Livemint (2013) Microsoft names new MD for its India R&D operations [Online]. Livemint.com. Retrieved from:http://www.livemint.com/Companies/NRC8udaYIeqgYuWkF2UrEI/Microsoft-names-new-MD-for-its-India-RD-operations.html[Accessed 11 December 2013]
Marketplace (2013) why companies are getting rid of cubicle walls [Online]. Marketplace.org. Retrieved from:http://www.marketplace.org/topics/business/why-companies-are-getting-rid-cubicle-walls [Accessed 11 December 2013]
Palugod, N. and Palugod, P. (2011) GLOBAL TRENDS IN OFFSHORING AND OUTSOURCING. International Journal of Business and Social Science. Vol. 2. No. 16
Phang, L. (2001) Understanding Virtual Organizations, ISACA, volume 6.